Marshall, Alfred (1842–1924)

Alfred Marshall was born in Bermondsey (Surrey, United Kingdom) in a middle-class family. After attending Merchant Taylors' School, in London, he was admitted to St John's College, Cambridge, graduating as second in the first class of the Mathematical Tripos in 1865. Deep concern for the human and social problems of the time triggered his interest in moral and mental science, eventually determining the choice of economics as his subject of study. This apprenticeship gave him a unique combination of technical skills and wide philosophical and historical perspectives, as witnessed by his early writings. As a fellow of St John's, he lectured in the Moral Sciences Tripos, mainly on economics, until 1877 when his marriage with Mary Paley forced him to resign because celibacy was required by Cambridge University regulations. The couple moved to live near Bristol University College, where Alfred was appointed professor of political economy. After a short spell in Oxford, in 1885, he returned to Cambridge where he spent the rest of his academic life, successfully fighting to establish the Economics Tripos before his retirement in 1908. In 1890, he published Principles of Economics, which he revised up to the 8th edition, in 1920. His other major work, Industry and Trade, ideally a sequel to Principles, was published in 1919. A third book, Money, Credit and Commerce (1922), is a collection of earlier material on monetary issues. After his death, A. C. Pigou edited Memorials of Alfred Marshall (1925), which collects most of his articles.

Marshall devoted great attention to consumers' behavior although, unlike other marginalist economists, he awarded it no special prominence as the foundation of economic theory. He believed demand and supply, wants and activities to be symmetrical forces whose joint action determines the value of goods, as in the metaphor of the two blades of a pair of scissors. Moreover, in the long run, activities were considered to play a more important role in shaping the evolution of the economy. He thought the main causal influence of consumption was due to its effects on producers, whose working abilities depend on the standard of life. Insofar as consumption raises the standard of life, it enhances the productivity of labor and promotes economic growth. Marshall distinguished this aspect of consumption from its more limited function of giving pleasure and satisfaction to the consumer, without any effect on his or her productivity. The latter only raises the standard of comfort, in contraposition to the standard of life. Both, however, fall under the unified utilitarian evaluation of the consumer who maximizes his or her satisfaction. This is a clear instance of the mix of utilitarian and evolutionary considerations that characterize Marshall's economics. Each single choice, at a given moment, is explainable in utilitarian terms, as the result of driving forces that can be compared and accurately measured thanks to the yardstick provided by money. This gives economics its unique position among the social sciences. But in the long term, the quality of the choices themselves shapes the economic system and reacts on its functioning.

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